DUBLIN (Reuters) - Ireland will look at possibly selling its energy and gas assets and will force holders of subordinated bank debt to shoulder losses as part of its IMF/EU bailout, a memorandum of understanding showed yesterday.

Prime Minister Brian Cowen agreed an emergency aid package last week in a last ditch bid to shore up the country’s financial sector and help halt contagion fears that have shaken the euro zone.

Under the deal, Dublin has agreed to regular scrutiny of its finances, including an International Monetary Fund assessment of its central bank, the creation of multi-annual spending targets and the establishment of an independent budgetary advisory council.

Cowen has also agreed for the government to review its energy sector, “with a view to setting appropriate targets for the possible privatisation of state-owned assets”.

The government has committed to making holders of bank subordinated debt pay for part of the bailout costs through discounted buybacks, which the memorandum said, would start by the end of March next year.

But in a speech to parliament, Finance Minister Brian Lenihan reiterated that senior bondholders in banks would not be forced to pay up given the opposition of the European Central Bank to such a move.

“The strongly held belief among our European partners is that any move to impose burden sharing on this group of investors would have the potential to create a huge wave of further negative market sentiment towards the euro zone and its banks system,” he said.

Lenihan confirmed the government’s forecast for Gross Domestic Product (GDP) to expand next year by 1.75 percent despite the European Commission saying on Monday that it expected Ireland to grow at just 0.9 percent next year.

The EC expects Ireland to grow by 1.9 percent in 2012 compared with a government forecast of 3.25 percent and has given Dublin an extra year, until 2015, to get its budget deficit under control.

Cowen and Lenihan need to pass the 2011 budget, set to be the toughest on record, in order to qualify for the first instalment of funds from the EU and IMF and bilateral loans from the UK, Sweden and Denmark.

The government had pledged not to further cut public sector pay as part of future budgets but in the memo the government has said it will consider reductions to the public sector wage bill if projected savings are not made from voluntary redundancy programmes and administrative efficiencies.